TikTok recently pledged to create a new joint venture to manage its U.S. operations. This move is a key piece of their efforts to respond to increasing regulatory scrutiny and user demands for privacy. The entire goal of the joint venture is to make TikTok more compliant with U.S. national security legal requirements regarding data privacy and cybersecurity. Its precise mandate is still a mystery.
The latest undertaking will broaden consent forms to cover collection of their users’ activities, which includes learning more about user interactions with TikTok’s AI-generated features. The new privacy policy for 2024 takes a big step in this direction. The app will stop collecting any GPS data, even rough data, from US users. This step is intended to allay fears surrounding user data safety. This is in response to a recent wave of legislation that would endanger TikTok’s availability on U.S. shores.
ByteDance, TikTok’s parent company, retains a minority interest of under 20% in the new venture. Right now they’re doing this on joint bases with American investors such as Silver Lake and the Abu Dhabi state owned joined up investment fund MGX. Our partnership is focused on securing U.S. user data, apps, and algorithms by implementing robust data privacy and cybersecurity principles.
Concerns about the increased influence Beijing could have over TikTok’s operations continue to make headlines. In 2024, Congress and the Biden administration moved forward with a bill directing the executive branch to ban TikTok in the United States by January 2025. Should ByteDance not divest its American operations to U.S.-based investors, the ban will be implemented. This legislation, the RESTRICT Act, was largely fueled by fears that Beijing could use TikTok to access sensitive data on American users.
The announcement of the joint venture is heralded amid years of escalating crisis in relations between Washington and Beijing. These conflicts started under former President Donald Trump’s administration. Trump had rescheduled enforcement of this piece of legislation again and again until this joint venture was completed.
Republican Representative John Moolenaar was not convinced that ByteDance should be allowed to continue playing a role in TikTok’s U.S. operations. He questioned, “Does this deal ensure China does not have influence over the algorithm? Can the parties involved assure Americans their data is secure?”
Even the House Select Committee on China has alluded to these same concerns. They allude to a desire to shield American user data from foreign malign influence.
“User data will be secured in Oracle’s U.S. cloud environment.” – joint venture
Though TikTok and its new partners have provided some reassuring messages, difficult tests remain in the future. From automakers to tech companies, various stakeholders are watching the impact of this joint venture very closely.